Can you tell me about the forthcoming IPO of Biba Apparels?

Biba Apparels, a popular up-market fashion house specializing in ethnic wear for women, has just filed for its Rs.1,500 crore IPO. The draft red herring prospectus (DRHP) has been filed with SEBI and normally the regulator takes 2-3 months to approve the DRHP, which comes in the form of observations on the DRHP. Most likely, the approval will come by June or July and the IPO is slated to hit the market by July or August this year.

Biba Apparels has the backing of Warburg Pincus and Faering Capital. Incidentally, Faering Capital was floated by Aditya Parekh and Sameer Shroff and manages close to Rs.3,800 crore of assets in India. Aditya Parekh is the son of the legendary Deepak Parekh of HDFC. The IPO would raise a very small amount by way of fresh issue but the IPO would predominantly target the OFS to give exit to promoters and the PE funds.

Biba Apparels adds to the already long line of fashion apparel that has recently hit the IPO market including Go Colors and Vedant Fashions (owners of the famous Manyavar brand of ethnic wear). Biba will look to raise Rs.1,500 crore through the public issue, which will include Rs.100 crore by way of fresh issue and the balance of Rs.1,400 crore via offer for sale. The PE investment in Biba happened way back in the year 2013.

In fact, back in December 2013, the investment of Rs.300 crore by Warburg Pincus and Faering Capital marked the largest investment in an ethnic wear Indian brand by a global PE fund. The stake had been acquired from Future Lifestyle Fashions, which had exited Biba Apparels. Biba has a 34-year pedigree and was introduced in India in 1988 by designer Meena Bindra. IT dominates the mid-range and upper-range ethnic wear for women.

Biba is a formidable brand with exposure to jewelry, footwear, and fragrances; apart from ethnic wear. It currently boasts 300 stores across 120 cities in India. In addition, Biba is also present in major national retail chains like Shopper's Stop, Lifestyle, Reliance, etc. It now plans to diversify by opening another 200 stores largely in Tier 2 and Tier 3 cities. Ecommerce pushes 25% sales and that is likely to go up to 35% in 3 years.

The book running lead managers (BRLMs) to the issue are JM Financial, HSBC Securities, DAM Capital (formerly IDFC Securities), Equirus Capital, and Ambit Capital. The IPO is likely to be listed in the NSE and the BSE.